April 27, 2012

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In this Blue Oval Connect Weekly Briefing…

  • Voluntary Lump-Sum Payment Opportunity Coming for Ford GRP Retirees, Surviving Beneficiaries
  • Financial Results
  • Ford Returned to Investment Grade by Fitch
  • All-New Ford Escape with EcoBoost Engine EPA-Certified at 33 MPG, the Most Fuel Efficient Small SUV on Market
  • Ford Unveils Historic All-New Focus Electric Pace Car for NASCAR Capital City 400 Race This Weekend
  • Outside Voices: (Fortune Online) Alan Mulally, Optimism and the Power of Vision

 

Top Stories
Voluntary Lump-Sum Payment Opportunity Coming for Ford GRP Retirees, Surviving Beneficiaries
As part of the company's long-term strategy to de-risk its global funded pension plans, Ford is announcing today that it will offer to about 90,000 eligible U.S. retirees, former employees and surviving beneficiaries the option to receive a one-time voluntary lump-sum pension payment.

This voluntary opportunity allows salaried (primarily) retirees and surviving beneficiaries to take the remaining value of their General Retirement Plan (GRP) benefit* as a single payment instead of continuing monthly payments. This is intended to be a one-time-only offer that may also include additional monthly pension benefit payment options. At this time, the lump sum pension payment opportunity is only available under the GRP. Other Ford-sponsored pension plans are not included, i.e., UAW Retirement Plan, UAW Personal Retirement Plan.

This is the first time a program of this type and magnitude has been offered by a U.S. company.

Payouts will start later this year and will be funded from existing pension plan assets. This is in addition to the lump-sum pension payout option available to future retirees as of July 1, 2012.

"Continuing to improve the underlying strength of our balance sheet remains a fundamental part of financing the One Ford plan," said Bob Shanks, Ford executive vice president and chief financial officer. "Providing the option of a lump-sum payment to eligible U.S. retirees and former employees benefits the company because it will reduce our pension obligations and balance sheet volatility."

Given the large number of eligible individuals, a series of election periods will be held throughout 2012 and 2013. Retirees and surviving beneficiaries will be assigned a specific election period based on a random process using the last two digits of the retiree's Social Security number. No action is required at this time by retirees or surviving beneficiaries.

Eligible retirees and surviving beneficiaries will receive an announcement letter during the week of April 30, 2012 and additional information will be available prior to the start of their assigned election period.

*Benefits are governed by the terms of the applicable official plan document or policy. Summaries of benefits are available; however, if a conflict exists between any summary and the official plan document, the official plan document prevails. The policies, plans and programs described in this communication are not contracts and do not alter any at will relationship the Company has with its employees. The Company may modify or terminate these policies, plans and programs at any time.

To read brief Q&A on this voluntary lump-sum pension payment opportunity, click here.

To read this article on @Ford online with the Q&A on this voluntary lump-sum pension payment opportunity, click here.

Ford Oval
Ford Earns First Quarter Pre-Tax Operating Profit of $2.3 Billion and Net Income of $1.4 Billion
Ford Motor Company today reported 2012 first quarter pre-tax operating profit of $2.3 billion, or 39 cents per share, and net income of $1.4 billion, or 35 cents per share, led by strong performance in North America and Ford Credit. Ford has now been profitable on a pre-tax operating basis for 11 consecutive quarters.

"Our team delivered a solid performance during the first quarter, with particularly strong results in North America, despite a challenging global external environment," said Alan Mulally, Ford president and CEO. "We remain focused on investing for future growth and developing outstanding products with segment leading quality, fuel efficiency, safety, smart design and value."

The results compare to 2011 first quarter net income of $2.6 billion, or 61 cents per share, and pre-tax operating profit of $2.8 billion, or 47 cents per share, adjusted for the tax valuation allowance release. Lower wholesale volumes, reflecting in part weaker economic conditions in Europe, contributed to the decline from a year ago.

First quarter 2012 net income was affected by the impact of the higher tax expense compared to a year ago, resulting from the release of the tax valuation allowance in fourth quarter 2011. The increase in noncash tax expense explains about half of the decrease in net income, with the balance reflecting lower operating results and increased special charges, primarily buyouts of hourly workers in the U.S. as part of the 2011 UAW agreement.

Ford finished the first quarter with Automotive gross cash of $23 billion, compared with $21.3 billion as of March 31, 2011, and $22.9 billion as of Dec. 31, 2011. Ford had total Automotive debt of $13.7 billion as of March 31, 2012, compared with $16.6 billion as of March 31, 2011, and $13.1 billion as of Dec. 31, 2011. Total Automotive liquidity at the end of the first quarter was $32.9 billion, including all available credit lines. This compares to $30.7 billion as of March 31, 2011, and $32.4 billion as of Dec. 31, 2011.

Ford generated positive Automotive operating-related cash flow of $900 million in the first quarter, the eighth consecutive quarter of positive performance. First quarter liquidity actions also included the successful amendment and extension of the company’s revolving credit facility, resulting in commitments of $9 billion through November 2015 and an additional $300 million through November 2013.

To read the full release and Alan Mulally's message to employees, click here.

Fitch Rating Logo
Ford Motor Company Returned to Investment Grade by Fitch
Fitch Ratings has upgraded the Issuer Default Ratings (IDRs) for Ford Motor Company and its Ford Motor Credit Company LLC captive finance subsidiary to 'BBB-' from 'BB+'. The Rating Outlook for both Ford and Ford Credit is Stable.

"We are very pleased with today's decision by Fitch. It is an important proof point of the continued progress the Ford team is making with our One Ford plan. Moving forward, we will continue to focus on driving profitable growth for all of our stakeholders. In fact, our One Ford plan includes achieving strong investment grade ratings and maintaining investment grade throughout an economic cycle," said Bob Shanks, executive vice president and chief financial officer, Ford Motor Company.

To read the full article, click here.

Related Material:


Ford News
Ford Escape
All-New Ford Escape with EcoBoost Engine EPA-Certified at 33 MPG, the Most Fuel Efficient Small SUV
The new Ford Escape is certified by the U.S. EPA as the most fuel efficient small SUV with an automatic. The Escape's 1.6-liter EcoBoost® engine is certified at 33 mpg – 2 mpg better than the Honda CR-V and 5 mpg better than Toyota RAV4. All three engines in the new Escape are EPA-certified at 30-plus mpg on the highway. The 2.0-liter EcoBoost, certified at 30 mpg on the highway, beats the Toyota RAV4 by 3 mpg and the Chevrolet Equinox by 6 mpg.

"The fuel economy of the all-new Escape showcases the continued success of Ford's development of smaller, yet more powerful engines," said Raj Nair, group vice president, Ford Global Product Development. "Ford understands people want fuel-efficient vehicles without sacrificing power and space requirements."

To read the full article, click here.

Waste to Landfill Graphic
Ford Sets New Goal to Build on Success of Cutting Waste
Ford plans to further reduce the amount of waste it sends to landfills by 10 percent per vehicle by the end of the year – building on existing efforts that have cut global waste by 100 million pounds (44 percent) in the last five years. If successful, that means the company would generate about 20 pounds of waste per vehicle on a global basis – roughly the weight of one tire.

"Reducing waste to landfills is one of our top environmental priorities and we continue to challenge our teams to identify and implement innovative solutions," said Andy Hobbs, director, Ford's Environmental Quality Office.

Ford develops such targets as part of its annual environmental business planning process that also recently led to establishment of a global cross-functional team spanning several divisions to review waste generation more holistically.

Between 2007 and 2011, Ford globally cut the amount of waste it sends to landfills by 39 percent per vehicle – from 37 pounds to just under 23 pounds. In North America, the amount of waste generated per vehicle has been cut even further – by 47 percent.

To read the full article, click here.

Focus Electric Pace Car
Ford Unveils Historic All-New Focus Electric Pace Car for NASCAR Capital City 400 Race This Weekend
After being unveiled in a public ceremony at the Virginia State Capitol, the 2012 Focus Electric pace cars are ready for their historic race weekend when they become the first all-electric vehicles to pace a NASCAR Sprint Cup event.

The two Focus Electric vehicles will perform all pace car duties for the Capital City 400 presented by Virginia is for Lovers Saturday night at Richmond International Raceway.

This marks the latest in a line of groundbreaking moments for Ford in NASCAR. In addition to being the first manufacturer to compete with a four-door sedan as its flagship model in 1998, Ford was also first to use a hybrid to start a NASCAR event when the Fusion Hybrid served as pace car for the Ford 400 at Homestead-Miami Speedway in 2008.

In January, Ford became the first manufacturer to show off its 2013 NASCAR race car when it unveiled the new 2013 Fusion racer to media in Charlotte, N.C.

To read the full article, click here.

Outside Voices
Alan Mulally, Optimism and the Power of Vision
(Forbes Online) Ford President and CEO Alan Mulally is a relentlessly optimistic. Optimism is one of seven traits that all inspiring leaders share. Even in the depths of the auto crisis in 2008, Mulally was the one who always had a smile on his face and a spring in his step. To read the full article, click here.

 


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